Questions tagged [401k]

A 401(k) account is a tax-deferred retirement savings account setup by many employers for their employees in the United States. Employees can elect to contribute part of their earnings - either pre-tax or after-tax - to their 401k account and the employer will often make a matching contribution for a portion of it. The before-tax and/or after-tax contributions are subject to yearly limits set by the IRS. Related to the 403b and Thrift Savings Plan (TSP)

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5
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1answer
114 views

401K Rollover for small amount

Earlier in the year (07/03/217) I closed out an "old" employer sponsored 401K by rolling over to an existing personal Rollover IRA ($12,619.90). Now, on 12/07/2017, there was a "contribution" (or ...
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1answer
52 views

Can I rollover a traditional IRA into a self-employed 401k if the self-employed business had no income this year?

I have a self-employed 401k, and I want to rollover a traditional IRA into it. My self-employed business has no income this year, and I'm wondering if the rollover is allowed without tax penalties.
3
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1answer
278 views

Why would an employer set a limit for the after-tax non-Roth contributions below the IRS limit (54,000 USD in 2017)?

I read on https://www.reddit.com/r/financialindependence/comments/7i8olw/list_of_companies_offering_mega_backdoor_roth/dqyayt5/ (mirror): Even on this thread you'll see some [employer's 401(k) ...
4
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1answer
197 views

Calculating tax on 401(k) to Roth IRA conversion

I understand that doing a conversion from a 401(k) into a Roth IRA is a taxable event. I'm trying to understand the details of how this is taxed. Many resources, including this answer and this blog ...
0
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1answer
143 views

How can one convert, penalty-free, a traditional, pretax 401(k) to a Roth IRA, without being 59.5 or leaving one's job?

I wrote in one question (mirror) that: A traditional, pre-tax 401(k) may be rolled over to a traditional IRA or Roth IRA if older than 59.5-year-old or if leaving one's job. Someone commented ...
1
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1answer
80 views

Transferring of pre-tax 401K to Roth IRA: do states charge taxes on the transfer?

Transferring a pre-tax 401k to a Roth IRA incurs paying ordinary income taxes. In CO they charge an additional 5%. Are there states that do not charge the additional tax (e.g., Ohio, North/South ...
3
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2answers
790 views

Can one roll over an after-tax 401(k) to a Roth IRA, then any time in the future withdraw my contributions tax-free and penalty-free?

Can one roll over an after-tax 401(k) to a Roth IRA, then any time in the future withdraw one's contributions (that were initially made to the after-tax 401(k)) tax-free and penalty-free? Background ...
4
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2answers
324 views

What are the pros and cons of converting an after-tax 401(k) to a Roth 401(k)?

What are the pros and cons of converting an after-tax (a.k.a. post-tax) 401(k) to a Roth 401(k)? From what I can see: pro: in the Roth 401(k), earnings made on the contributions are tax-free, unlike ...
3
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3answers
647 views

Why would an employer limit their employees' 401(k) paycheck deduction?

Some employers limit their employees' 401(k) paycheck deduction. For example: The maximum contribution to Pre-tax 401k deferral, Roth 401k deferral, After tax is 65 percent. Why would an employer ...
0
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2answers
98 views

401k plan vs company size [closed]

I am looking for financial information about a private company. All I could find that is publicly disclosed is the 401k plan details (form 5500) The form mentions a plan net asset of $1.5M, 19 ...
2
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1answer
507 views

Why would an employer not allow their employees to perform a “mega Roth IRA backdoor” (i.e., convert from an after-tax 401(k) to a Roth IRA)?

My employer offers a 401(k) plan through Vanguard to its employees. There exist two types of Roth IRA Rollover: Convert from a non-deductible traditional IRA to a Roth IRA (a.k.a., "Roth IRA ...
4
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2answers
250 views

Given the changes to income tax rates, should I change my 401(k) strategy?

With a new standard deduction of $24,000, how does that change my strategy for whether to put my $18,000 of 401(k) money in a Roth vs. a traditional account? What new strategies (particularly with tax-...
4
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1answer
198 views

Is there any benefit to contributing to 401(k) throughout the year?

Let's say that I'm going to max out my 401(k) contribution limit for next year. ($18,000) My company offers no 401(k) match. Typically in years past I have contributed a percentage of my check every ...
9
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2answers
644 views

Can an employer change 401(k) rules to exclude part-time employees who previously participated?

I currently participate in a 401(k) at my work. I am classified as a part time employee with accruals but no benefits currently. For next year, my classification is the same, but now work is not ...
2
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1answer
63 views

Maximum 401(k) contribution at end of year self employed?

I have 401(k) through work that gets contributed monthly and it has maxed out contributions for the year ($18K). My wife doesn't have 401(k) and is self employed. If she opens 401(k) at the end of ...
0
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1answer
73 views

How do you find a fund to match a much higher fee fund in one's 401(k)?

I keep hearing about how it's really important to use low fee funds (especially those from Vanguard) in your 401(k) to avoid high fees, especially over the years. I just have no idea how to identify ...
11
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3answers
2k views

Why does one have to withdraw money from a 401(k) when older than 70.5?

I read on the IRS Roth Comparison Chart (mirror): Required Distributions (for Pre-Tax 401(k) or Designated Roth 401(k)): Distributions must begin no later than age 70½, unless still working and ...
2
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1answer
168 views

401(k) lump sum distribution limited because of highly compensated employees?

I have left a company where I did not meet the 5 year vested date (no problem and understand). However, what I don't understand is how can an employer limit my lump sum on the full distribution (yes, ...
0
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1answer
89 views

What are my tax-advantaged investment options at a university job?

I am moving from a private job to a post-doc at the beginning of 2018. In my private gig, I had the opportunity to divert part of my wages into a SIMPLE IRA. This was in addition to the Roth that I ...
3
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1answer
447 views

Avoiding taxes on backdoor Roth IRA conversion

I have 4 accounts: Vanguard traditional IRA with ~$90k in it Vanguard Roth IRA ~$25k in it Vanguard 401k from a former employer that has ~$40k in it Mass Mutual 401k from current employer that has ~...
5
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1answer
58 views

Contribution date for retirement account vs IRS Annual Limit

I want to max out my contributions to a retirement account for the current year. The employer pays twice monthly (mid-month and end of month). Looking at my retirement account website, there's a ...
5
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2answers
216 views

Max out 401(k) or leverage tax changes from a Roth?

I am in my early 30's, and currently I am putting away about $12,000 a year into my 401(k) with a balance around $48,000. Also, two years ago I decided to start a Roth IRA because I figured it would ...
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2answers
177 views

Keep my second 401k or pay a chunk of mortgage? [duplicate]

I am 28, single (with no lady in sight), and I earn a high salary in a tech job. After moving to a new job, I have a 401k account from my previous employer (through Principal, employed for 2yrs) ...
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2answers
81 views

What is the tax levied against stock portion cashed out of 401k?

I need some help, I'm having a surprisingly difficult time getting an answer to my question. I will be cashing out the stock portion of a previous employer's 401k, I need to know what sort of tax (and ...
15
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11answers
7k views

I am failing to see the purpose of a Traditional IRA for someone who already has access to a 401(k)

If I understand correctly, the Traditional IRA, if you have 401k with an employer already, has the following features per IRS: Your contributions are taxed Your contributions are NOT taxed upon ...
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2answers
80 views

Does participating in a work 401k increase my take home from a Traditional IRA account?

I am checking out a Traditional IRA calculator and it seems that if I check that I have an Employer Plan (I do have a 401k plan), my after Tax return is 272k. If I uncheck that box, the number goes ...
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2answers
169 views

2 401k's and a SEP-IRA

I have been a contractor for 9 months of this year where I earned 1099 income. I am an employee with a company that has a 401k. I am over 50 so I can contribute $24,000 to the company 401k, and the ...
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1answer
73 views

401k withdrawal tax implications

Assuming age 62 or so, what are the tax implications on 401k withdrawals? I am particularly interested in capital gains. Let's say I invested $100,000. If that money does not appreciate and I ...
0
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2answers
269 views

Pay off Credit Card Debt

$60K credit card debt (sick child had to quit job) Should I look at pulling this from my IRA, 401K, or a loan against the mortgage? Income is too low to keep up payments and I am hoping to prevent ...
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2answers
125 views

Making 401(k) and 529 contributions from other investments

My take home pay essentially covers my living expenses, but I am only contributing enough to my 401(k) to get the match from my employer and I am not contributing to a 529 plan for my son. In ...
4
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4answers
170 views

401k withdraw funds or switch companies?

I recently left my job. They provided a 401k and its currently at ~$10K. What do I do now? I'm relatively young and this is my first time dealing with a 401k. My questions are... Do I have to ...
1
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1answer
172 views

Question regarding withdrawal from Roth 401(k) for first time home buyer

Suppose I have about 60k in my Roth 401(k) account. (50k on contributions + 10k earned through trading stocks using the 50k over time) I am a first time buyer and am planning to withdraw funds.. so I ...
26
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6answers
7k views

Does borrowing from my 401(k) make sense in my specific circumstance?

I know the standard answer and understand that I will be losing out on that compound interest, but I am young and only need to borrow a few thousand. here are some more details: Need to borrow $6500 ...
2
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1answer
546 views

Mega backdoor Roth: Is there a 10% penalty if I withdraw from a Roth IRA after an in-service conversion from after-tax 401(k)?

My question is whether I face a 10% penalty on withdrawing money from a Roth IRA after a mega backdoor Roth. Assume I am younger than 59 years old. In more detail: I contribute $10K after-tax to my ...
2
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4answers
538 views

which types of investments should be choosen for 401k at early 20's?

I am choosing my 401(k) investment options from my company. I am seeing alot of recommendations in stack exchange that at a young age, one should allocate money towards stocks. However in the 401(k) ...
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3answers
897 views

How can I configure my Vanguard 401(k) account so that the pre-tax 401(k) deferral is always the maximum possible?

How can I configure my Vanguard 401(k) account so that the pre-tax 401(k) deferral is always the maximum possible (e.g., over 18kUSD in 2017, excluding the employer matching)? When I go to the ...
3
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2answers
2k views

Does Vanguard ensure that employees do not overcontribute to their 401(k)?

I read on http://www.doughroller.net/retirement-planning/happens-contribute-401k/: Most of us won’t have to worry about contributing more than the annual limit. Even if you have enough money ...
1
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4answers
1k views

Borrow from 401k for down payment on rental property?

I'm saving up to buy a rental property, it will take a few years. I've been maxing out my 401k contributions at 18k per year plus employer match. I've got plenty in the fund to borrow from it to make ...
2
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2answers
158 views

2 active 401k plans

I contribute a maximum (18k) to my employers 401k. They give 5% match. It is a target fund ISJIX. When I look at the performance of ISJIX compared to the VTIVX (over last 10 years) I see a huge ...
1
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1answer
220 views

401(k) withdrawal for first time home buyer

My wife and I are expecting to buy a home either this year or next, will start looking in the next month. It will a first home for the both of us. I currently have both 401(k) and 401(a) from a ...
1
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1answer
119 views

How does a typical vesting timeline work with respect to employer contributions?

I'm reading over some benefits documents Vesting Your contributions to the account are vested immediately. You are fully vested in company contributions after two years. If you were a ...
9
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1answer
477 views

Does cashing out 401k interfere in unemployment

If I cash in my 401k do I have to log that as earned income on my weekly unemployment filing in Arizona. I had no choice since $160 per week does not pay my bills. I used it to pay off my car and a ...
2
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0answers
188 views

Using the rule of 55

If I wanted to withdraw $50k out of my 401(k) using the rule of 55, How much more will I have to pay to get that amount. Will I have to pay the 20% federal tax and the 10% early withdrawal penalty and ...
5
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2answers
517 views

Taking full advantage of 401k match when you don't want it

Suppose you have $100,000 "locked" into a traditional IRA. You work at an employer that will match 50% of your 401k contributions (any amount up to 18K limit). Vesting is immediate. Suppose you ...
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2answers
1k views

I contribute to 401k. If I go back to my home country India, what taxes will I have to pay?

I am on H1b visa and contribute to 401k. If I go back to my home country India, what taxes will I have to pay in both US and India? For the financial year 2017, the lowest tax bracket is $9,325, so I ...
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3answers
58 views

Expiring 401(k) Stock Option and Liquidation Implications

Through my company's 401(k) plan, I was able to invest in the parent company's common stock. However, earlier this year after we were sold to another company, the common stock of the original company ...
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4answers
249 views

I'm trying to setup my 401k with 5% match from my employer

I am newbie and I need help setting up my 401k. Basically, I just want to avail my employer's maximum match, and 5% is the minimum needed to reach it. But I'm not sure if I am doing it right. Here's ...
3
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1answer
162 views

Contributing to 401k and IRA in the same year [duplicate]

For 2017 the IRA contribution limit is $5500 and 401k contribution limit is $18,000. Could you contribute $5500 to the IRA and $18,000 to the 401k in the same year or are you limited to one account or ...
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2answers
115 views

Capital Gains Taxes for Mutual Funds and Tax Bracket Implications

Assume my taxable income is within the 25% bracket, and my mutual funds have capital gains that year. Additionally, my being in the 25% bracket occurs before the capital gains are accounted for. It ...
1
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1answer
161 views

What dictates 401K loan interest rates?

I have seen it commonly mentioned that 401K loans are offered commonly at Prime + 1% rates? But is that required by law? What section of the tax code addresses the upper and lowerbounds on interest ...